Notice of Determination and Action Pursuant to Section 301: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute, 54245-54264 [2019-22056]

Agencies

• Office of the United States Trade Representative

[Federal Register Volume 84, Number 196 (Wednesday, October 9, 2019)]
[Notices]
[Pages 54245-54264]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22056]


-----------------------------------------------------------------------

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. USTR-2019-0003]


Notice of Determination and Action Pursuant to Section 301: 
Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of determinations and action.

-----------------------------------------------------------------------

SUMMARY: The U.S. Trade Representative has determined that the European 
Union (EU) and certain member States have denied U.S. rights under the 
World Trade Organization (WTO) Agreement and have failed to implement 
WTO Dispute Settlement Body recommendations concerning certain 
subsidies to the EU large civil aircraft industry. The U.S. Trade 
Representative has determined to take action in the form of additional 
duties on products of certain member States of the EU, as specified in 
Annex A to this notice.

DATES: The additional duties set out in Annex A are applicable with 
respect to products that are entered for consumption, or withdrawn from 
warehouse for consumption, on or after 12:01 a.m. eastern daylight time 
on October 18, 2019.

FOR FURTHER INFORMATION CONTACT:  For questions about the 
determinations in this investigation, contact Assistant General Counsel 
Megan Grimball, (202) 395-5725, or Director for Europe

[[Page 54246]]

Michael Rogers, at (202) 395-3320. For questions on customs 
classification of products identified in Annex A, contact 
[email protected].

SUPPLEMENTARY INFORMATION: 

A. Proceedings in the Investigation

    On April 12, 2019, the U.S. Trade Representative announced the 
initiation of an investigation to enforce U.S. rights in the WTO 
dispute against the EU and certain EU member States addressed to 
subsidies on large civil aircraft. See 84 FR 15028 (April 12 notice). 
The April 12 notice contains background information on the 
investigation and the dispute settlement proceedings, as well as the 
website where you can find the WTO reports: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds316_e.htm.
    The April 12 notice solicited comments on a proposed determination 
that, inter alia, the EU and certain member States have denied U.S. 
rights under the WTO Agreement, and in particular, under Articles 5 and 
6.3 of the Agreement on Subsidies and Countervailing Measures (SCM 
Agreement) and the General Agreement on Tariffs and Trade 1994 (GATT 
1994), and have failed to comply with the WTO Dispute Settlement Body 
(DSB) recommendations to bring the WTO-inconsistent subsidies into 
compliance with WTO obligations. The April 12 notice invited public 
comment on a proposed action in the form of an additional ad valorem 
duty of up to 100 percent on products of EU member States to be drawn 
from a list of 317 tariff subheadings and 9 statistical reporting 
numbers of the Harmonized Tariff Schedule of the United States (HTSUS) 
included in the annex to that notice.
    The public comment process following the April 12 notice included 
an opportunity for the submission of written comments, and the 
opportunity to participate in a public hearing. The Office of the 
United States Trade Representative (USTR) received over 600 
submissions, and held a 2 day public hearing where 47 witnesses 
provided testimony.
    In response to these public comments, and upon further analysis, 
USTR published a notice inviting public comment on a second list of 
products also being considered for an additional ad valorem duty of up 
to 100 percent. See 84 FR 32248 (July 5, 2019) (July 5 notice). USTR 
received nearly 1,900 submissions in response to the July 5 notice, and 
held a hearing on August 5, 2019, where 31 witnesses provided 
testimony.
    The public versions of submissions received in response to the 
April 12 and July 5 notices, as well as transcripts of both hearings, 
are available on www.regulations.gov under docket number USTR-2019-
0003.
    As stated in the April 12 and July 5 notices, any final list of 
products subject to additional tariffs would take into account the 
report of the WTO Arbitrator on the appropriate level of 
countermeasures authorized by the WTO. On October 2, 2019, the WTO 
Arbitrator issued a report that concluded that the appropriate level of 
countermeasures in response to the WTO-inconsistent launch-aid provided 
by the EU or certain member States to their large civil aircraft 
domestic industry is approximately $7.5 billion annually.

B. Determination of Whether U.S. Rights Under a Trade Agreement Are 
Being Denied

    Based on the original panel and appellate reports, the compliance 
panel and appellate reports, the report of the WTO Arbitrator, and 
information obtained during the investigation, including public 
comments and the advice of the Section 301 Committee, the U.S. Trade 
Representative has determined, under sections 301(a), 304(a), and 
306(b) of the Trade Act of 1974 (Trade Act) (19 U.S.C. 2411(a), 2414(a) 
and 2416(b)), that the rights of the United States under the GATT 1994 
and the SCM Agreement, particularly Articles 5 and 6.3 of the SCM 
Agreement, are being denied; that subsidies provided by the EU and 
certain member States violate, or are inconsistent with, the provisions 
of these agreements; and that the EU has not satisfactorily implemented 
a recommendation of the WTO DSB. For these reasons, the U.S. Trade 
Representative has made an affirmative determination of actionability 
under sections 301(a), and 304(a)(1)(A) of the Trade Act.

C. Determination of Action

    Upon making an affirmative determination that U.S. rights under a 
trade agreement are being denied, or that an act, policy, or practice 
of a foreign country violates, or is inconsistent with, the provisions 
of, a trade agreement, section 301(a) of the Trade Act provides that 
the U.S. Trade Representative shall take all appropriate and feasible 
action authorized under section 301(c), subject to the specific 
direction, if any, of the President regarding such action, and all 
other appropriate and feasible action within the power of the President 
that the President may direct the U.S. Trade Representative to take 
under section 301(a), to enforce such rights or to obtain the 
elimination of such act, policy, or practice.
    Pursuant to sections 301(a), 301(c), 304(a)(1)(B), and 306(b) of 
the Trade Act (19 U.S.C. 2411(a), 2411(c), 2414(a)(1)(B), and 2416(b)), 
the U.S. Trade Representative has determined to impose additional 
duties on products of certain EU member States, as specified in Annex A 
to this notice. The annual trade value of the list of tariff 
subheadings subject to additional duties is approximately $7.5 billion, 
which is consistent with the WTO Arbitrator's finding on the 
appropriate level of countermeasures. Annex A identifies the products 
covered by the action, the rate of duty to be assessed, and the EU 
member States affected. The final list of products and rates of 
additional duty take into account the public comments and the testimony 
from the public hearings, the advice of advisory committees, and the 
advice of the Section 301 Committee. In accordance with section 
306(b)(2)(F) of the Trade Act (19 U.S.C. 2416(b)(2)(F)), Annex A 
includes reciprocal goods of the affected industry. Annex B contains 
the same list of tariff subheadings, with unofficial descriptions of 
the types of products covered in each subheading.
    In order to implement this determination, effective October 18, 
2019, subchapter III of chapter 99 of the HTSUS is modified by Annex A 
of this notice. Products provided for in new HTSUS subheading 
9903.89.05 will be subject to an additional ad valorem duty of 10 
percent. Products provided for in new HTSUS subheadings 9903.89.10, 
9903.89.13, 9903.89.16, 9903.89.19, 9903.89.22, 9903.89.25, 9903.89.28, 
9903.89.31, 9903.89.34, 9903.89.37, 9903.89.40, 9903.89.43, 9903.89.46, 
and 9903.89.49, will be subject to an additional ad valorem duty of 25 
percent.
    The additional duties provided for in the new HTSUS subheadings 
established by Annex A apply in addition to all other applicable 
duties, fees, exactions, and charges.
    Any product listed in Annex A, except any product that is eligible 
for admission under `domestic status' as defined in 19 CFR 146.43, 
which is subject to the additional duty imposed by this determination, 
and is admitted into a U.S. foreign trade zone on or after 12:01 a.m. 
eastern daylight time on October 18, 2019, only may be admitted as 
`privileged foreign status' as defined in 19 CFR 146.41. Such products 
will be subject upon entry for consumption to any ad valorem rates of 
duty or quantitative limitations related to the

[[Page 54247]]

classification under the applicable HTSUS subheading.
    The U.S. Trade Representative will continue to consider the action 
taken in this investigation. In determining whether future 
modifications may be appropriate, the U.S. Trade Representative will 
take into account the public comments and testimony previously provided 
in response to the April 12 and July 5 notices. USTR remains open to 
discussing matters related to this investigation with the EU and EU 
member States.

Joseph Barloon,
General Counsel, Office of the U.S. Trade Representative.
BILLING CODE 3290-F0-P
[GRAPHIC] [TIFF OMITTED] TN09OC19.002


[[Page 54248]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.003


[[Page 54249]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.004


[[Page 54250]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.005


[[Page 54251]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.006


[[Page 54252]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.007


[[Page 54253]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.008


[[Page 54254]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.009


[[Page 54255]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.010


[[Page 54256]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.011


[[Page 54257]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.012


[[Page 54258]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.013


[[Page 54259]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.014


[[Page 54260]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.015


[[Page 54261]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.016


[[Page 54262]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.017


[[Page 54263]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.018


[[Page 54264]]


[GRAPHIC] [TIFF OMITTED] TN09OC19.019

[FR Doc. 2019-22056 Filed 10-8-19; 8:45 am]
 BILLING CODE 3290-F0-C